Companies and directors need to do more to engage shareholders.
This was the underlying message from Richard Daly, CEO of
Broadridge Financial Solutions, in an address earlier this week
to the National Press Club in Washington, D.C.

According to Daly, retail shareholder engagement is down
significantly and despite a rash of regulatory changes designed
to empower investors and increase transparency, only a very small
percentage of shareholders actually vote. “In 2010, just
one in 20 individual retail investors voiced their opinions about
the companies they invested in by exercising their fundamental
shareholder right. That compares to recent historical levels four
to five times as high.”

Daly called on corporate CEOs and directors to address this
decline in voting and examine ways to bring
shareholders—especially employee shareholders—back into the fold.
“Public companies need to understand the seriousness of this
issue and act to reverse this troubling decline to get each of
their individual investors—and all individual investors
generally—engaged with their companies,” he said.

Broadridge and Daly have been pushing investors and companies to
increase individual shareholders voting and he encouraged public
company CEOs to “join with us in launching a nationwide effort to
encourage their employees—numbering in the tens of millions—to
exercise a fundamental shareholder right, and need, to vote their
proxy ballots, whether it be proxies relating to their employer
or proxies relating to other companies in which they invest.”

As part of the effort, Daly said he is contacting the chief
executives of America’s top 1,000 public companies to encourage
them to motivate their employee shareholders to vote their
shares.

In order to increase engagement and to reverse the decline in
individual voter participation companies may need to realize
greater efficiency in the distribution and collection of proxy
voting materials. To this end, Broadridge is informing
shareholders, within the constraints of regulatory boundaries, of
the ability to receive and act on communications through digital
channels. Investors are now able to, in many cases, access proxy
and annual meeting materials online and even cast votes through
electronic methods including the internet, mobile devices and
cell phones.

With increased disclosure requirements on director skills and
compensation, communicating with investors and telling the
company story is more important than ever. Beyond securing the
vote for the board, there are other, strategic reasons to advance
shareholder participation.

“Companies that can distinguish their investors’ opinions from
others’ will more easily have the strength and confidence to stay
on course and create value. There is no greater show of support
than the ballot, or in this case, the proxy,” Daly concluded.